IKB Deutsche Industriebank Aktiengesellschaft IKB FINANCE B.V.

similar investments in a conventional debt security. Such risks include the risk that the holder of such
Note will receive no interest at all, or that the resulting interest rate will be less than that payable on a
conventional debt security at the same time and/or that the holder of such Note could lose all or a
substantial portion of the principal of its Notes. In addition, investors should be aware that the market
price of such Notes may be very volatile (depending on the volatility of the relevant currency, commodity,
interest rate, index or formula).
Neither the current nor the historical value of the relevant currencies, commodities, interest rates or
other indices or formulae should be taken as an indication of future performance of such currencies,
commodities, interest rates or other indices or formulae during the term of any Note.
Subordinated Notes of IKB AG and IKB FINANCE
IKB AG and IKB FINANCE may issue subordinated Notes. The obligations of IKB AG and IKB FINANCE
in case of Subordinated Notes constitute unsecured and subordinated obligations. In the event of the
dissolution, liquidation, institution of insolvency proceedings over the assets of, composition or
other proceedings for the avoidance of institution of insolvency proceedings against the relevant
Issuer, such obligations will be subordinated to the claims of all unsubordinated creditors of the relevant
Issuer so that in any such event no amounts shall be payable under such obligations until the
claims of all unsubordinated creditors of the relevant Issuer shall have been satisfied in full. No
Holder may set off its claims arising under the Notes against any claims of the relevant Issuer. No
security of whatever kind is, or shall at any time be, provided by the relevant Issuer or any other person
securing rights of the Holders under such Notes. No subsequent agreement may limit the subordination
or amend the Maturity Date in respect of the Notes to any earlier date or shorten any applicable
notice period (Kündigungsfrist).
Subordinated Notes of IKB AG
If the Notes are redeemed before the Maturity Date otherwise than in the circumstances described in
§ 2 of the Terms and Conditions or as a result of an early redemption according to § 5(1) or the Terms
and Conditions or repurchased by IKB AG otherwise than in accordance with the provisions of
§ 10(5a) sentence 6 of the German Banking Act (Gesetz für das Kreditwesen), then the amounts redeemed
or paid must be returned to IKB AG irrespective of any agreement to the contrary unless the
amounts paid have been replaced by other liable capital (haftendes Eigenkapital) of at least equivalent
status within the meaning of the German Banking Act, or the Federal Supervisory Authority for
Financial Services (Bundesanstalt für Finanzdienstleistungsaufsicht) has consented to such redemption
or repurchase.
Subordinated Notes of IKB FINANCE
In respect of subordinated obligations of IKB FINANCE, all obligations of IKB AG as Guarantor under
the Subordinated Guarantee rank at least pari passu with all other unsecured and subordinated present
or future obligations of the Guarantor. In the event of the dissolution, liquidation, institution of
insolvency proceedings over the assets of, composition or other proceedings for the avoidance of
institution of insolvency proceedings over the assets of, or against, the Guarantor, such obligations
will be subordinated to the claims of all unsubordinated creditors of the Guarantor so that in any such
event no amounts shall be payable under such obligations until the claims of all unsubordinated
creditors of the Guarantor shall have been satisfied in full. No Holder may set off its claims arising
under the Subordinated Guarantee against any claims of the Guarantor. No security of whatever kind
is, or shall at any time be, provided by the Guarantor or any other person securing rights of the
Holders under the Notes or the Subordinated Guarantee. No subsequent agreement may limit the
subordination or shorten the term of the Guarantee to a date falling before the Maturity Date. If payments
are made before the Maturity Date otherwise than in the circumstances described in the Terms
and Conditions of the Notes are repurchased by the Issuer or the Guarantor otherwise than in accordance
with the provision of § 10 (5a) sentence 6 of the German Banking Act (Gesetz über das Kreditwesen),
then the amounts redeemed or paid must be returned to the payer irrespective of any agree-
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